Progressive Capitalism by David Sainsbury: A new centre ground is being forged

This book is equally important for what it says and for who is saying it. A decade ago, this prospectus would have seen its author branded “Red Sainsbury”. Now it is sensible and mainstream.

Progressive Capitalism: How to Achieve Economic Growth, Liberty and Social Justice
David Sainsbury
Biteback, 256pp, £20

This book is equally important for what it says and for who is saying it. The argument that growth, liberty and social justice require a fundamental reform of capitalism is rapidly moving from the left to the mainstream; and nothing symbolises this more than that David Sainsbury, the epitome of the progressive mainstream since his days in the vanguard of David Owen’s SDP in the 1980s, should be making it.

It is a powerful and cogent critique. Sainsbury was an effective science minister under Tony Blair who greatly increased state support for science. However, he writes: “It was only after I left government . . . that I began to question fundamentally the neoliberal political economy which had dominated governments in the western world for the last 35 years.”

Partly this was because of the 2008 crash and a growing conviction that competitiveness required a “race to the top” – not neo - liberalism’s “race to the bottom” – with state support for employment, innovation and skills. But there was also a telling personal dimension: the private equity takeover bid for his family firm, Sainsbury’s, in the summer of 2007. “There was not the slightest pretence of trying to improve the performance of the company,” he claims. The bidders proposed “to sell off all the properties and replace them with massive debts. Then they would put the company back on the market . . . and walk away with £1bn of profit.” The City was wildly keen, salivating at the £100m in fees the investment banks stood to earn: “a perfect example of wealth appropriation as opposed to wealth creation”.

The policy prospectus set out in the second half of the book is a must-read for anyone seeking to make sense of that new catchphrase “active industrial policy”. Sainsbury recommends far-reaching reform of equity markets to foster the creation and expansion of companies rather than their destruction and foreign takeover; a “national system of innovation” with the state as a key player; and a revolution in technical and vocational education that emulates German strength in these areas, although he warns against copying Germany glibly.

On equity markets, he favours a big cut in the fees paid to investment managers and a new “Shareholders’ Advisory Board” to promote “an understanding of the fundamental value of the companies in which [the City] invest[s]” rather than their short-term trading value. Investment managers should also get far more involved in the governance of the companies they own, including the appointment of directors and holding them to account, and constrain the boardroom pay explosion which shows little sign of abating. A wildly overpaid City breeds a wildly overpaid corporate sector.

Sainsbury is especially bold on takeovers. He proposes higher “hurdles” in shareholder support required from within the target company, and restrictions on those who can vote to those who have held shares in the target company for “a certain number of years”. This goes way beyond the 2012 Kay review of equity markets and long-term decision-making.

On innovation, Sainsbury supports the coalition’s establishment of Catapult Centres – national technology and innovation hubs in key industrial sectors, starting with highvalue manufacturing – but he favours more support for new technologies. Government departments should have “embedded R&D units” to promote technology and innovation on a strategic long-term basis; and regional development agencies – abolished by the coalition in 2010 – should be restored “in parts of the country which need them”.

A dramatic increase in the supply of technicians, especially with engineering skills, is Sainsbury’s goal for a revamped education and training system. Kenneth Baker’s new breed of university technical colleges for 14- to-19-year-olds should be expanded and local industry integrated in the management of further education. Some would go further and seek to introduce an English equivalent of Germany’s “dual system”, whereby employers and local authorities take joint responsibility for a system of mass apprenticeships with highquality vocational training alongside. But Sainsbury does not think this feasible because of the weakness of Britain’s chambers of commerce, trade associations and trade unions in comparison with Germany.

Sainsbury would pioneer reform through an “enabling state”, rather than through a return to “command and control”. But an enabling state is not a smaller state. “A first task of progressive politicians is to persuade people of the importance of competent and active government, standing above sectional interests,” he writes. This, conceptually, is a return to mainstream social democracy after its partial abandonment in recent decades. It cannot be achieved without a transformation in the capabilities of government, including a new national economic council and a much more purposeful civil service.

Sainsbury also puts in a heartfelt personal plea, from a public-spirited party donor caught up in party funding controversies, for state funding of parties so that governments of both parties are better able “to stand up to the financial power of interest groups”, be they trade unions or investment managers and bankers.

A decade ago, this prospectus would have seen its author branded “Red Sainsbury”. Now it is pretty sensible and mainstream. A new centre ground is being forged.

Andrew Adonis is the author of “5 Days in May: the Coalition and Beyond” (Biteback, £12.99)

The argument that growth, liberty and social justice require a fundamental reform of capitalism is rapidly moving from the left to the mainstream. Photograph: Getty Images.

This article first appeared in the 20 May 2013 issue of the New Statesman, The Dream Ticket

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How Ken Loach's radical vision won him a second Palm d'Or

In Loach's films, authenticity is everything, and when his quest for realism pays off, there's nothing as raw in all of cinema.

On 22 May, at the age of 79, Ken Loach became the first British director to win the top prize twice at the Cannes Film Festival. His previous Palme d’Or, in 2006, was for The Wind That Shakes the Barley, which dramatised the British occupation of Ireland and the origins of the IRA. This time, he won for I, Daniel Blake, the story of an ailing carpenter wrongly declared fit for work by the callous UK benefits system. No wonder Ed Vaizey, the culture minister, could issue only the most grudging acknowledgement, alluding vaguely to “Brit success!” in a tweet that failed to mention either Loach or the film.

The actor and Cannes jury member Donald Sutherland, on the other hand, called I, Daniel Blake “an absolutely terrific movie that resonates in your heart and soul”. It was an incongruous delight to see Loach posing before swarms of paparazzi. He usually disdains such frivolities; he might be red but he’s hardly red carpet. “As a film-maker, you’re forever involved in things that constantly inflate their own importance,” he once complained. Artifice, hyperbole and celebrity hold no appeal. Even film-making itself is full of irritating impediments. “If Loach could make a film without a camera, he would,” said Trevor Griffiths, who collaborated with him on Fatherland (1986).

Authenticity is everything. Unusually, Loach shoots in sequence, even if it requires moving back and forth at great cost between locations. In the days of celluloid, he would forfeit much of his fee to buy more film stock so that his beloved improvisations could roll on and on. When I visited the set of Carla’s Song near Loch Lomond in 1995, Loach gave the actor Robert Carlyle a good-natured ticking off for speaking to me between takes. “I’d rather he didn’t talk to anyone,” he said, “because then he’ll start thinking about things in terms of technique and who he really is, and it’ll all become conscious.”

When the quest for realism pays off, there is nothing as raw in all cinema. Think of the chilling attack on a family home by loan sharks in his 1993 drama Raining Stones, one of the films that began his most successful period, or the climax of Cathy Come Home, made for the BBC in 1966 and arguably his most groundbreaking film. As Cathy (Carol White) has her children taken off her by social workers and police, Loach films the entire traumatic episode in a wide shot with a hidden camera to preserve the reality. The movie led directly to the founding of Crisis.

Conversely, Loach at his worst can be one of the most simplistic sentimentalists out there. The characterisation of the salt-of-the-earth heroes in recent films such as Jimmy’s Hall and Route Irish, or the pantomime-villain Brits in The Wind That Shakes the Barley, shows what happens when action is overpowered by agenda.

Born in Nuneaton, Warwickshire, Loach read law at Oxford but became seduced by theatre directing and acting: he was in a revue for which Dudley Moore composed the music, and understudied in the West End in One Over the Eight. He joined the BBC in 1963, where he brought extra earthiness to Z-Cars before finding his ideal outlet in The Wednesday Play slot that went out after the news. “We were very anxious for our plays not to be considered dramas but as continuations of the news,” he said. He made ten TV films under that banner but it was with his second movie, Kes, in 1969, that he took flight, proving that the gritty and the lyrical need not be mutually exclusive.

His politics was fully formed by this point. Though he has rejected claims that he is Marxist or Trotskyist, he admits that the analysis to which he turned after his disillusionment with Harold Wilson in the mid-1960s was a Marxist one. “The idea of a class analysis was the one we identified with,” he said of himself and his collaborators the producer Tony Garnett and the writer Jim Allen. “What we realised was that social democrats and Labour politicians were simply acting on behalf of the ruling class, protecting the interests of capital.”

This stance was consolidated by a series of run-ins in the 1980s, when he saw his work banned and thwarted by political forces. The transmission of his four-part 1983 television documentary Questions of Leadership, which asked whether the trade union leadership was adequately representing its members’ interests, was delayed and blocked by Labour string-pulling. Which Side Are You On? – a documentary about the miners’ strike – was rejected because of footage showing police violence.

Since his full-time return to cinema in the early 1990s, acclaim has eclipsed controversy. Even if he had not won a Palme d’Or, his stamp is all over other directors who have won that award in the past 20 years. The Belgian social realists Jean-Pierre and Luc Dardenne (Rosetta, The Child) have never hidden their debt to him, while recent winners such as Jacques Audiard (Dheepan) and Cristian Mingiu (4 Months, 3 Weeks, 2 Days) exhibit his mixture of directness, compassion and realism.

If there is anything that defines him, it is his fight, which has made it possible for him to remain one of cinema’s angriest and most effective voices. “In the long term, I guess I’m optimistic because people always fight back,” he said. “The reason to make films is just to let people express that, to share that kind of resilience because that’s what makes you smile. It’s what makes you get up in the morning.”

“I, Daniel Blake” is released later this year

Ryan Gilbey is the New Statesman's film critic. He is also the author of It Don't Worry Me (Faber), about 1970s US cinema, and a study of Groundhog Day in the "Modern Classics" series (BFI Publishing). He was named reviewer of the year in the 2007 Press Gazette awards.

This article first appeared in the 26 May 2016 issue of the New Statesman, The Brexit odd squad